U-MING — AGM Information 2020

Jun 18, 2020

U-MING MARINE TRANSPORT CORP.

Meeting Minutes for the 2020 Annual Shareholders’ Meeting

Time: 9:00 a.m., June 9, 2020

Place: Taipei Hero House’s Auditorium (No. 20, Sec. 1, Changsha St., Zhongzheng Dist., Taipei, Taiwan)

Total number of outstanding shares: 845,055,712 shares

Total shares represented by presence of shareholders: 529,859,012 shares (62.70%)

In attendance: Hsu, Shu-Tong (Chairman of the board)

Hsu, Shu-Ping (Director) Chang, Tsai-Hsiung (Director) Lee, Kun-Yen (Director) Douglas Jefferson Hsu (Director)

Ong Choo Kiat (Director)

Chu, Shao-Hua (Independent Director & Member of Remuneration Committee & Chairman of Audit Committee)

Liu, Chorng-Jian (Independent Director & Member of Remuneration Committee)

Pan, Wen-Yen (Independent Director)

Tung, Li-Chen (Member of Remuneration Committee)

Lee, Cheng-Ming (Auditor) Chen, Hsin-Ying (Lawyer)

Chairperson: Hsu, Shu-Tong

Recorder: Alex Chen

Important Resolutions

• I. Matters To Be Reported

1. 2019 Business Report

2. 2019 Financial Statements

3. The Audit Committee’s Review Report on 2019 Business and Financial Statements

4. Distribution of 2019 Remuneration to the Employees and Directors

5. The amendments to “Ethical Corporate Management Best Practice Principles” and “Code of Ethical Conduct” of the Company

II. Matters To Be Ratified

1. The 2019 Business Report and Financial Statements

• Explanation:

• (1) The supervisor’s review report is hereby issued after reviewing the 2019 financial

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statements (including the business report and the independent auditor’s report issued by CPA Cheng-Ming Lee and CPA Li-Wen Kuo of Deloitte & Touche; please refer to the attachment P.1~P.16) without any nonconformity identified.

• (2) Please approve.

Resolved that:

Shareholders who are present represented 529,859,012 votes in total (including electronic votes). 505,383,464 votes (including electronic votes) ratify the motion, accounting to 95.38% of total votes ； 236,255 votes (including electronic votes) against the motion ； 22,076,318 votes (including electronic votes) abstained. The motion is ratified.

2. The proposal for Earnings Distribution of 2019

• Explanation:

• (1) Please refer to the 2019 Earnings Distribution proposed in accordance with Article 27 of the Company’s Articles of Incorporation as follows::

of the Company’s Articles of Incorporation as follows::
	NT$
Unappropriated retained earnings of previous year	7,839,084,966
Less: Investment adjusted retained earnings by using
equity method	(418,770)
Add: 2019 actuarial gain & losses appropriated retained
earnings	6,685,065
Add: Proceeds from sale of financial assets at fair value
through other comprehensive income	202,872,771
Adjusted unappropriated retained earnings	8,048,224,032
Add: 2019 net income	1,621,695,422
Less: 10% legal reserve appropriated	(183,083,449)
Earnings available for distribution	9,486,836,005
Less: 2019 earning distribution
(cash dividend NT$1.9 per share)	(1,605,605,853)
Unappropriated retained earnings	7,881,230,152

• (2) The distribution of earnings is calculated to the dollar (round up to the dollar). The total amount of the odd shares will be booked as the other income of the Company. It is proposed that the Board authorized the Chairman to fix the record date of ex-cash dividend after the approved by the year 2020 annual shareholders’ meeting. Upon the approval of the annual shareholders’ meeting, it is proposed that the Board be authorized to adjust the amount per share based on the actual shares outstanding number on the record date of ex-cash dividend for the legal reserve distribution by cash if there is an amendment of the number of shares

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outstanding before the date.

• (3) Please approve.

Resolved that:

Shareholders who are present represented 529,859,012 votes in total (including electronic votes). 506,009,383 votes (including electronic votes) ratify the motion, accounting to 95.50% of total votes ； 253,371 votes (including electronic votes) against the motion ； 21,433,283 votes (including electronic votes) abstained. The motion is ratified.

III. Matters to Be Discussed

1. The Amendment to the Company Corporate Charter (Articles of Incorporation)

• Explanation:

• (1) According to the official letter issued by the Ministry of Economic Affairs (Letter No. EC 10802432410) on January 9, 2020, which specifies the basis for the legal reserve, it is proposed to amend the No. 27 of the Articles of Incorporation and it will be applied to the earnings distribution of financial statements of 2019. Please refer to the attached Article Amendments Table for amended articles.

• (2) This proposal has been approved by the 4th meeting of the eighteenth-term Board of Directors on March 10, 2020.

• (3) The proposal is hereby presented for referendum.

Resolved that:

Shareholders who are present represented 529,859,012 votes in total (including electronic votes). 506,002,510 votes (including electronic votes) ratify the motion, accounting to 95.50% of total votes ； 249,864 votes (including electronic votes) against the motion ； 21,443,663 votes (including electronic votes) abstained. The motion hereby is accepted as submitted.

2. The Amendment to the “Rules of Procedure for Shareholders’ Meetings” of the Company

Explanation:

• (1) Pursuant to the Company’s actual operation and according to the “Sample Template for XXX Co., Ltd. Rules of Procedure for Shareholders Meetings” issued by Taiwan Stock Exchange Corporation, it is proposed to amend the “Rules of Procedure for Shareholders’ Meetings” of the Company. Please refer to the attached Article Amendments Table for amended articles.

• (2) This proposal has been approved by the 4th meeting of the eighteenth-term Board of Directors on March 10, 2020.

• (3) The proposal is hereby presented for referendum.

Resolved that:

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Shareholders who are present represented 529,859,012 votes in total (including electronic votes). 505,965,184 votes (including electronic votes) ratify the motion, accounting to 95.49% of total votes ； 276,762 votes (including electronic votes) against the motion ； 21,454,091 votes (including electronic votes) abstained. The motion hereby is accepted as submitted.

IV. Extempore Motions: None

V. Meeting Adjourned

Chairperson:

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Recorder:

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(Attachment)

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 7) Financial assets at fair value through profit or loss - current (Notes 8 and 25) Financial assets at fair value through other comprehensive income - current (Notes 9 and 26 ) Contract assets - current (Notes 19 and 25 ) Trade receivables from unrelated parties (Note 10) Trade receivables from related parties (Notes 10 and 25) Other receivables (Note 25) Fuel inventory Other current assets (Note 25) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Note 9) Financial assets at amortized cost - non-current Investments accounted for using the equity method (Note 12) Property, plant and equipment (Notes 13, 26 and 27) Intangible assets Deferred tax assets (Note 21) Prepayments for equipment (Note 13) Refundable deposits (Notes 25 and 26) Long-term receivables - related parties (Note 25) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 15) Short-term bills payable (Notes 15 and 26) Financial liabilities at fair value through profit or loss - current (Note 8) Trade payables (Note 25) Other payables (Note 16) Current tax liabilities (Note 21) Current portion of long-term borrowings (Notes 15 and 26) Other current liabilities (Note 25) Total current liabilities NON-CURRENT LIABILITIES Bank loans (Notes 15 and 26) Deferred tax liabilities (Note 21) Deferred revenue - non-current Net defined benefit liabilities - non-current (Note 17) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 18) Common share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2019 Amount % $ 15,879,242 26 1,941,208 3 7,124,123 12 224,736 - 195,226 - 107,888 - 236,807 1 561,531 1 218,067 - 26,488,828 43 2,544,561 4 192,182 - 2,913,190 5 27,933,249 45 58,799 - 11,703 - 1,265,124 2 125,303 - 726,038 1 - - 35,770,149 57 $ 62,258,977 100 $ 6,500,000 11 3,205,321 5 189,635 - 188,561 - 1,000,195 2 105,919 - 3,387,593 6 200,521 - 14,777,745 24 20,151,636 33 174,185 - 142,330 - 168,522 - 20,636,673 33 35,414,418 57 8,450,557 14 115,152 - 6,693,492 11 - - 9,669,918 15 16,363,410 26 1,915,440 3 26,844,559 43 $ 62,258,977 100		2018
				Amount % $ 16,684,916 27 2,741,003 4 5,815,650 9 189,352 - 355,817 1 81,322 - 185,829 - 410,314 1 232,767 - 26,696,970 42 2,024,330 3 - - 2,826,266 5 29,939,341 48 34,624 - 17,895 - 747,189 1 108,076 - 809,669 1 4,291 - 36,511,681 58 $ 63,208,651 100 $ 6,615,000 10 4,748,161 8 106,395 - 104,938 - 1,219,360 2 28,911 - 6,330,698 10 215,969 - 19,369,432 30 17,673,689 28 170,677 - 170,679 - 198,639 1 18,213,684 29 37,583,116 59 8,450,557 13 115,123 - 6,526,608 11 2,000,954 3 7,526,115 12 16,053,677 26 1,006,178 2 25,625,535 41 $ 63,208,651 100

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE Freight revenue (Notes 19, 25 and 27) Other operating revenue (Note 20) Total operating revenue OPERATING COSTS Freight cost (Notes 20 and 25) GROSS PROFIT OPERATING EXPENSES (Notes 20 and 25) PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income (Note 25) Finance costs (Note 20) Interest income Dividend income Gain on disposal of property, plant and equipment Net gain on sale of investment Net gain on foreign currency exchange (Note 28) Share of the profit or loss of associates and joint ventures (Note 12) Other losses Net gain (loss) on financial assets and liabilities at fair value through profit or loss Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (BENEFIT) (Note 21) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss:		2019 Amount % $ 9,822,632 98 245,282 2 10,067,914 100 8,173,206 81 1,894,708 19 438,981 5 1,455,727 14 14,728 - (619,040) (6) 592,935 6 101,715 1 52,395 - 25,019 - 2,760 - 52,749 1 (6,098) - 66,910 1 284,073 3 1,739,800 17 118,105 1 1,621,695 16		2018
				Amount % $ 11,350,673 98 172,549 2 11,523,222 100 9,808,074 85 1,715,148 15 382,139 4 1,333,009 11 19,795 - (626,789) (5) 446,047 4 114,654 1 285,551 2 24,402 - 64,732 1 143,749 1 (6,438) - (165,608) (1) 300,095 3 1,633,104 14 (35,736) (1) 1,668,840 15

(Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Remeasurement of defined benefit plans (Note 17) Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on the financial statements of translating foreign operations Share of the other comprehensive (loss) income of associates accounted for using the equity method Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 22) Basic Diluted		2019 Amount % 3,587 - 2,109,054 21 24,599 - (981,092) (10) (37,329) - 1,118,819 11 $ 2,740,514 27 $ 1.92 $ 1.92		2018
				Amount % 3,949 - 613,277 5 8,216 - 1,337,998 12 43,817 - 2,007,257 17 $ 3,676,097 32 $ 1.97 $ 1.97
		$		$

(Concluded)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2018 $ 8,450,557 $ 115,135 Appropriation of 2017 earnings Legal reserve - - Cash dividends distributed by the Company - - Special reserve - - Change in capital surplus from investments in associates and joint ventures accounted for using the equity method - 4 Net profit for the year ended December 31, 2018 - - Other comprehensive income for the year ended December 31, 2018, net of income tax - - Total comprehensive income for the year ended December 31, 2018 - - Dividends claimed after over five years by shareholders - (16) Change from investments in associates and joint ventures accounted for using the equity method - - BALANCE AT DECEMBER 31, 2018 8,450,557 115,123 Appropriation of 2018 earnings Legal reserve - - Cash dividends distributed by the Company - - Reversal of special reserve - - Changes in capital surplus from investments in associates and joint ventures accounted for using the equity method - 29 Net profit for the year ended December 31, 2019 - - Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2019 - - Disposal of investments in equity instruments designated as at fair value through other comprehensive income - - Disposal of investments in equity instruments designated as at fair value through other comprehensive income by associate - - Changes from investments in associates and joint ventures accounted for using the equity method - - BALANCE AT DECEMBER 31, 2019 $ 8,450,557 $ 115,152	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 6,426,656 $ - $ 8,968,971 99,952 - (99,952) - - (1,014,067) - 2,000,954 (2,000,954) - - - - - 1,668,840 - - 3,337 - - 1,672,177 - - - - - (60) 6,526,608 2,000,954 7,526,115 166,884 - (166,884) - - (1,521,100) - (2,000,954) 2,000,954 - - - - - 1,621,695 - - 6,685 - - 1,628,380 - - 203,950 - - (1,078) - - (419) $ 6,693,492 $ - $ 9,669,918	Other Equity	Total $ (997,742) - - - - - 2,003,920 2,003,920 - - 1,006,178 - - - - - 1,112,134 1,112,134 (203,950) 1,078 - $ 1,915,440	Total Equity $ 22,963,577 - (1,014,067) - 4 1,668,840 2,007,257 3,676,097 (16) (60) 25,625,535 - (1,521,100) - 29 1,621,695 1,118,819 2,740,514 - - (419) $ 26,844,559
		Exchange Differences on Translating the Financial Statements of Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value through Other Gain (Loss) on Foreign Operations Comprehensive Income Hedging Instruments Gain on Property Revaluation $ (2,694,362) $ 1,696,487 $ - $ 133 - - - - - - - - - - - - - - - - - - - - 1,381,813 622,105 2 - 1,381,813 622,105 2 - - - - - - - - - (1,312,549) 2,318,592 2 133 - - - - - - - - - - - - - - - - - - - - (1,018,421) 2,130,555 - - (1,018,421) 2,130,555 - - - (203,950) - - - 1,078 - - - - - - $ (2,330,970) $ 4,246,275 $ 2 $ 133

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss reversed on trade receivables Net (gain) loss on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of the profit of associates and joint ventures Gain on disposal of property, plant and equipment Net (gain) loss on foreign currency exchange Net gain on disposal of investment Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Contract assets Trade receivables Other receivables Fuel inventory Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Acquisition of associates accounted for using the equity method Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits	2019 $ 1,739,800 2,399,876 11,437 (90) (66,910) 619,040 (592,935) (346,997) (52,749) (52,395) (54,393) (25,019) 914,967 (35,384) 134,129 41,993 (151,217) 14,750 83,623 (207,972) (15,448) (26,530) 4,331,576 499,964 346,997 (628,720) (31,434) 4,518,383 (10,000) 284,269 (192,182) (123,648) (1,387,811) 422,251 (17,411)	2018 $ 1,633,104 2,298,209 8,813 (120) 165,608 626,789 (446,047) (287,203) (143,749) (285,551) 129,382 (24,402) (1,442,682) (189,352) 114,502 459,489 13,879 (66,661) (26,598) 305,392 4,008 (1,309) 2,845,501 453,198 287,203 (618,738) (31,376) 2,935,788 (35,346) - - (167,888) (465,669) 518,053 1,869 (Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Decrease in financing provided - related parties Payments for intangible assets Increase in other non-current assets Increase in prepayments for equipment Dividends received from associates accounted for using the equity method Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Repayments of) proceeds from short-term borrowings (Repayments of) proceeds from short-term bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid to owners of the Company Net cash (used in) generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2019 57,496 (4,574) - (610,951) 74,564 (1,507,997) (115,000) (1,544,000) 7,795,975 (8,048,265) (1,521,100) (3,432,390) (383,670) (805,674) 16,684,916 $ 15,879,242	2018 26,530 (20,945) (3,077) (1,257,364) 73,417 (1,330,420) 630,000 2,150,000 8,229,743 (5,882,922) (1,014,083) 4,112,738 438,260 6,156,366 10,528,550 $ 16,684,916

(Concluded)

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders U-Ming Marine Transport Corporation

Opinion

We have audited the accompanying consolidated financial statements of U-Ming Marine Transport Corporation and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies(collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Impairment of Transportation Equipment

As the nature of the business of the Group pertains to marine transportation, the transportation equipment is material to its financial statements. Also, the estimates and assumptions adopted by the management in the impairment assessment of the transportation equipment directly impact the recognition of impairment loss on assets in the financial statements. As a result, impairment assessment of the transportation equipment was deemed to be a key audit matter. For information on the impairment assessment of the transportation equipment was deemed to be a key audit matter. For information on impairment assessment of transportation equipment, refer to Note 5 to the consolidated financial statements: critical accounting judgments and key sources of estimation uncertainty.

The main audit procedures that we performed in respect of the key audit matter stated above were as follows:

1. We understood and tested the design and implementation of the key controls over the impairment assessment of property, plant and equipment.

2. We independently assessed the Group’s internal and external information to evaluate the rationality of management’s identification of impairment indicators for transportation equipment. Given that there were impairment indications, we performed the following:

3. a. We obtained the asset impairment valuation form produced by the management for each cash-generating unit.

4. b. We assessed and consulted with our internal specialist regarding the reasonableness of accounting estimates used in the impairment assessment, such as the identification of cash-generating units, the confirmation of fair value of transportation equipment by obtaining supporting documents, and the discount rate and future cash flows used in determining the recoverable amount under the discounted cash flow method..

Stage of Completion of Freight Contracts

The Group’s freight revenue is recognized by reference to the stage of completion of the contract. Because management is required to exercise judgements and to have estimates to a certain extent when measuring and calculating the stage of completion of freight contracts, revenue recognition and expression might be affected by the selection and application of calculation methods; therefore, the determination of the stage of completion of freight contracts was deemed to be a key audit matter. Refer to Note 5 to the consolidated financial statements: critical accounting judgments and key sources of estimation uncertainty for information on the stage of completion of freight contracts.

The main audit procedures that we performed in respect of the key audit matter stated above were as follows:

1. We understood and tested the design and implementation of the key controls over the recognition of freight revenue.

2. We obtained relevant documents and understood the determination of the stage of completion of freight contracts, and we confirmed that the calculation method is appropriate and applied consistently.

3. We verified the management’s calculation of percentage of voyages and freight revenue by collating the information on actual voyages, entering/departing reports, sailing schedule and freight contracts.

Other Matter

We have also audited the parent company only financial statements of U-Ming Marine Transport Corporation as of and for the years ended December 31, 2019 and 2018 on which we have issued an unmodified opinion.

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Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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1. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

2. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Cheng-Ming Lee and Li-Wen Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China

March 10, 2020

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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U-MING MARINE TRANSPORT CORPORATION BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Contract assets Trade receivables from unrelated parties Trade receivables from related parties Other receivables Fuel inventory Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current Investments accounted for using equity method Property, plant and equipment Intangible assets Deferred tax assets Refundable deposits Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings Short-term bills payable Financial liabilities at fair value through profit or loss - current Trade payables Other payables Other payables from related parties Current tax liabilities Current portion of long-term borrowings Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Bank loans Deferred tax liabilities Net defined benefit liabilities - non-current Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Common share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2019 Amount % $ 45,064 - - - 1,984,687 4 4,562 - 7,890 - 63,349 - 37,524 - 28,669 - 53,371 - 2,225,116 4 1,267,653 2 47,352,099 92 839,966 2 56,274 - 11,703 - 58,487 - 8,780 - 49,594,962 96 $51,820,078 100 $ 6,500,000 13 3,199,322 6 - - 27,657 - 398,372 1 - - 105,252 - 1,035,000 2 15,538 - 11,281,141 22 13,396,648 26 174,185 - 123,545 - 13,694,378 26 24,975,519 48 8,450,557 16 115,152 - 6,693,492 13 - - 9,669,918 19 16,363,410 32 1,915,440 4 26,844,559 52 $ 51,820,078 100		2018
				Amount % $ 12,695 - 259 - 1,726,585 4 5,640 - 7,495 - 77,284 - 74,689 - 24,693 - 55,697 - 1,985,037 4 910,293 2 48,120,696 92 870,896 2 34,624 - 17,895 - 43,657 - 10,301 - 50,008,362 96 $ 51,993,399 100 $ 6,615,000 13 4,748,161 9 5,843 - 24,203 - 346,480 1 1,846,115 4 27,895 - 3,819,611 7 20,571 - 17,453,879 34 8,596,684 17 170,677 - 146,624 - 8,913,985 17 26,367,864 51 8,450,557 16 115,123 - 6,526,608 13 2,000,954 4 7,526,115 14 16,053,677 31 1,006,178 2 25,625,535 49 $ 51,993,399 100

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings/Losses Per Share)

OPERATING REVENUE OPERATING COSTS GROSS PROFIT OPERATING EXPENSES LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Financial costs Share of the profit or loss of subsidiaries, associates and joint ventures Interest income Dividend income Other income Net loss on foreign currency exchange Valuation gain on financial assets and liabilities at fair value through profit or loss, net Other losses Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (BENEFIT) NET PROFIT FOR THE YEAR		2019 Amount % $ 1,062,972 100 927,313 87 135,659 13 301,864 29 (166,205) (16) (272,034) (25) 2,023,359 190 668 - 97,117 9 42,718 4 (6,354) (1) 9,696 1 (5,114) - 1,890,056 178 1,723,851 162 102,156 9 1,621,695 153		2018
				Amount % $ 1,080,444 100 878,018 81 202,426 19 267,293 25 (64,867) (6) (331,247) (31) 1,788,982 166 280 - 108,572 10 44,684 4 (51,105) (5) 112,054 10 (5,607) - 1,666,613 154 1,601,746 148 (67,094) (6) 1,668,840 154 (Continued)

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings/Losses Per Share)

OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of subsidiaries, associates and joint ventures using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Share of the other comprehensive income of subsidiaries, associates and joint ventures using the equity method Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE Basic Diluted		2019	% - 58 143 (93) (3) 105 258		2018
		Amount $ (2,303) 615,462 1,524,081 (981,569) (36,852) 1,118,819 $ 2,740,514 $ 1.92 $ 1.92			Amount % $ (12,354) (1) 68,918 6 568,878 53 1,337,857 124 43,958 4 2,007,257 186 $ 3,676,097 340 $ 1.97 $ 1.97
		$			$

(Concluded)

13

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2018 $ 8,450,557 $ 115,135 Appropriation of 2017 earnings Legal reserve - - Cash dividends - - Special reserve - - Change in capital surplus from investments in associates and joint ventures accounted for using the equity method - 4 Net profit for the year ended December 31, 2018 - - Other comprehensive income for the year ended December 31, 2018, net of income tax - - Total comprehensive income for the year ended December 31, 2018 - - Dividends claimed after over five years by stockholders - (16 ) Change from investments in associates and joint ventures accounted for using equity method - - BALANCE AT DECEMBER 31, 2018 8,450,557 115,123 Appropriation of 2018 earnings Legal reserve - - Cash dividends - - Special reserve - - Changes in capital surplus from investments in associates and joint ventures accounted for using the equity method - 29 Net profit for the year ended December 31, 2019 - - Other comprehensive income for the year ended December 31, 2019, net of income tax - - Total comprehensive income for the year ended December 31, 2019 - - Disposal of investments in equity instruments designated as at fair value through other comprehensive income by subsidiary - - Disposal of investments in equity instruments designated as at fair value through other comprehensive income by associate - - Changes from investments in associates and joint ventures accounted for using the equity method - - BALANCE AT DECEMBER 31, 2019 $ 8,450,557 $ 115,152		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 6,426,656 - $ 8,968,971 99,952 - (99,952 ) - - (1,014,067 ) - 2,000,954 (2,000,954 ) - - - - - 1,668,840 - - 3,337 - - 1,672,177 - - - - - (60) 6,526,608 2,000,954 7,526,115 166,884 - (166,884 ) - - (1,521,100 ) - (2,000,954 ) 2,000,954 - - - - - 1,621,695 - - 6,685 - - 1,628,380 - - 203,950 - - (1,078) - - (419) $ 6,693,492 $ - $ 9,669,918	Other Equity	Total $ (997,742 ) - - - - - 2,003,920 2,003,920 - - 1,006,178 - - - - - 1,112,134 1,112,134 (203,950 ) 1,078 - $ 1,915,440	Total Equity $ 22,963,577 - (1,014,067 ) - 4 1,668,840 2,007,257 3,676,097 (16 ) (60) 25,625,535 - (1,521,100 ) - 29 1,621,695 1,118,819 2,740,514 - - (419) $ 26,844,559
			Unrealized Exchange Valuation Gain Differences on (Loss) on Translating the Financial Assets Financial at Fair Value Statements of through Other Gain (Loss) on Foreign Comprehensive Hedging Gain on Property Operations Income Instruments Revaluation $ (2,694,362 ) $ 1,696,487 - $ 133 - - - - - - - - - - - - - - - - - - - - 1,381,813 622,105 2 - 1,381,813 622,105 2 - - - - - - - - - (1,312,549 ) 2,318,592 2 133 - - - - - - - - - - - - - - - - - - - - (1,018,421) 2,130,555 - - (1,018,421) 2,130,555 - - - (203,950 ) - - - 1,078 - - - - - - $ (2,330,970) $ 4,246,275 $ 2 $ 133

14

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Net gain on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of the profit of subsidiaries, associates and joint ventures Net loss on foreign currency exchange Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Contract assets Trade receivables Other receivables Fuel inventory Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (Increase) decrease in refundable deposits Payment for intangible assets Increase in other non-current assets Increase in prepayment for equipment Dividends received from associates accounted for using the equity method Net cash generated from investing activities	2019 $ 1,723,851 129,682 10,786 (9,696) 272,034 (668) (97,117) (2,023,359) 11,896 4,112 1,078 13,540 37,479 (3,976) 2,340 3,454 46,349 (5,033) (25,382) 91,370 354 97,117 (268,192) (15,099) (94,450) (92,079) (14,830) (1,319) - (36,283) 3,297,226 3,152,715	2018 $ 1,601,746 115,156 8,813 (112,054) 331,247 (280) (108,572) (1,788,982) 173,746 7,079 (5,640) (21,961) (36,168) 591 6,179 (10,699) (24,609) 439 (8,293) 127,738 791 108,572 (328,964) (8) (91,871) (50,330) 4,885 (20,945) (3,078) (2,714) 3,300,617 3,228,435

(Continued)

15

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES (Repayments of) proceeds from short-term borrowings (Repayments of) proceeds from short-term bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Decrease in other payables from related parties Dividends paid Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2019 $ (115,000) (1,550,000) 7,209,000 (5,194,000) (1,854,720) (1,521,100) (3,025,820) (76) 32,369 12,695 $ 45,064	2018 $ 535,000 2,150,000 7,432,000 (3,200,000) (9,044,700) (1,014,083) (3,141,783) 254 (4,965) 17,660 $ 12,695

(Concluded)

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Amendments Table of “Articles of Incorporation”

No.		After amendment	Before amendment
Article 27		If the Corporation has a profit at the end of a fiscal year, the Corporation shall make up losses of previous year after paying business income taxes based on Law and, if there is any remaining profit,the Corporation shall add the items beyond the earnings of current period to earnings of current period as undistributed earnings for current period,and set aside 10% as legal reserve. In addition, after appropriation of special reserve based on provision in law, together with the accumulated undistributed earnings of the previous year, the total shall be the profit that is available for allocation. However, depending on the condition of the business, part of the profit shall be retained, to be allocated in proportion to all shares. In case of an increase in the capital of the Corporation, the shareholders bonus for the new shares for the same year shall be decided by the shareholders’ meeting. Dividends distributed to shareholders consideration shall be given to the business perspective of the corporation, the life cycle of various products or service provided, capital requirement in the future and the effect of possible changes of tax laws respectively, distributing under the objective of maintaining a stable dividend policy. For issue of dividend, except save for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required, when distributing shareholders’ dividend, which is not less than 50% of the final surplus of	If the Corporation has a profit at the end of a fiscal year, the Corporation shall make up losses of previous years after paying business income taxes based on Law and, if there is any remaining profit, a legal reserve of 10% of the balance shall be appropriated as legal reserve. In addition, after appropriation of special reserve based on provision in law, together with the accumulated undistributed earnings of the previous year, the total shall be the profit that is available for allocation. However, depending on the condition of the business, part of the profit shall be retained, to be allocated in proportion to all shares. In case of an increase in the capital of the Corporation, the shareholders bonus for the new shares for the same year shall be decided by the shareholders’ meeting. Dividends distributed to shareholders consideration shall be given to the business perspective of the corporation, the life cycle of various products or service provided, capital requirement in the future and the effect of possible changes of tax laws respectively, distributing under the objective of maintaining a stable dividend policy. For issue of dividend, except save for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required, when distributing shareholders’ dividend, which is not less than 50% of the final surplus of after-tax profit in same year to withhold accumulated losses, legal reserve and special reserve, the cash dividend shall not be lower than 10% of shareholders bonus of thatyear.

17

No.		After amendment	Before amendment
		after-tax profit in same year to withhold accumulated losses, legal reserve and special reserve, the cash dividend shall not be lower than 10% of shareholders bonus of that year.
Article 29		The Articles of Incorporation of the Corporation are stipulated on the 22nd day of June 1968 and after resolution was obtained in the stockholders’ regular meeting, it was submitted to the competent authority for approval and became effective on the same day. Subsequent amendment to these Articles of Incorporation shall become effective after being passed at the stockholders’ meeting. (Omitted) The forty-eighth revision was in June 13th 2019. The forty-ninth revision was in June 9th 2020.	The Articles of Incorporation of the Corporation are stipulated on the 22nd day of June 1968 and after resolution was obtained in the stockholders’ regular meeting, it was submitted to the competent authority for approval and became effective on the same day. Subsequent amendment to these Articles of Incorporation shall become effective after being passed at the stockholders’ meeting. (Omitted) The forty-eighth revision was in June 13th 2019.

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Amendments Table of “Rules of Procedure for Shareholders’ Meetings”

No.	After amendment	Before amendment
Article 10	For proposal in which discussion has been concluded or closed, the Chairperson shall submit it or voting. No discussion or voting shall proceed for matters unrelated to the proposal. The personnel responsible for overseeing and counting of the votes for resolutions shall be appointed by the Chairperson. The person responsible for vote overseeing shall be of the shareholder status.	For proposal in which discussion has been concluded or closed, the Chairperson shall submit it or voting. No discussion or voting shall proceed for matters unrelated to the proposal. The personnel responsible for overseeing and counting of the votes for resolutions shall be appointed by the Chairpersonwith the consent of the shareholders (or proxies).The person responsible for vote overseeing shall be of the shareholder status.
Article 11	In regards to the resolution of proposals, unless otherwise provided for in the relevant law and regulation or Company’s articles of incorporation, resolution shall be passed by a majority of the voting rights represented by the shareholders (or proxies) attending the meeting. Proposals shall be resolved by balloting. The Chairperson may refer the proposals to balloting one-by-one, or balloting of all proposals (including election) in aggregate at one time and count the votes cast separately on each proposal. If there are amendments or substitute proposals for the same proposal, the sequence of which to be put to vote shall be decided by the Chairperson. If one of the two proposals has been approved,the other shall be deemed	In regards to the resolution of proposals, unless otherwise provided for in the relevant law and regulation or Company’s articles of incorporation, resolution shall be passed by a majority of the voting rights represented by the shareholders (or proxies) attending the meeting. The proposal for a resolution shall be deemed approved if no objection expressed by stockholders casting their votes via electronic casting, and if the chairperson inquires and receives no objection from stockholders in attendance in person. The validity of such approval has the same effect as if the resolution has been put to vote. Proposals shall be resolved by balloting if the shareholders have objection to them.The Chairperson may refer the proposals to balloting one-by-one, or balloting of all proposals (including election) in aggregate at one time and count the votes cast separately on each proposal. If there are amendments or substitute proposals for the same proposal, the sequence of which to be put to vote shall be decided by the Chairperson. If one of the two proposals has been approved,the other shall be deemed

19

No.	After amendment	Before amendment
	rejected without requirement to put it to vote. The results of voting shall be reported on the spot and kept for records.	rejected without requirement to put it to vote. The results of voting shall be reported on the spot and kept for records.
Article 13	The Chairperson may announce for a halt of the meeting in the event of force majeure during the session, and may announce for the time of continuing the meeting depending on the circumstances.	The meeting shall be adjourned if encountering an air-raid alarm during the meeting. The meeting shall resume one hour after the alarm is lifted.

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